1.) Joint production costs are relevant to the decision to sell a product at the split-off point or to process the product further.

Group of answer choices

a.) true

b.) false

2.)Jump Company currently produces 12,000 units per year of a component part of its products. The cost per unit of this component part is given below: direct materials ................. $16

direct labor ..................... $12

variable overhead ................ $ 7

allocated fixed overhead ......... $ 9

total ............................ $44 An outside supplier has offered to sell Jump Company 12,000 units of this component part for $38 per unit. Accepting the offer will allow Jump Company to devote more resources to the production of a product that is in high demand. This will let Jump Company earn additional contribution margin of $63,000 per year. Calculate the selling price per unit charged by the outside supplier that would make Jump economically indifferent between making and buying the component part.

3.) ABC Company has the capacity to produce 54,000 units of product each month. Currently, ABC Company is selling 36,000 units at a selling price of $48 each. The following costs are incurred in order to produce each unit: variable costs ................ $29

fixed costs ................... $11 ABC Company has received a special order from a customer who wants to purchase 25,000 units at a reduced selling price of $31 per unit. ABC Company has determined that the variable costs for the special order units would be reduced by 20%. Calculate the amount of the increase in company profits if ABC Company accepts the special order.